A History of China by Wolfram Eberhard (read a book txt) 📖

often over 100 per cent of the value of the money coined. In addition to this, the metal was produced in the south, while the capital was in the north. The coin had therefore to be carried a long distance to reach the capital and to be sent on to the soldiers in the north.

To meet the increasing expenditure, an unexampled quantity of new money was put into circulation. The state budget increased from 22,200,000 in A.D. 1000 to 150,800,000 in 1021. The Kitan state coined a great deal of silver, and some of the tribute was paid to it in silver. The greatly increased production of silver led to its being put into circulation in China itself. And this provided a new field of speculation, through the variations in the rates for silver and for copper. Speculation was also possible with the deposit certificates, which were issued in quantities by the state from the beginning of the eleventh century, and to which the first true paper money was soon added. The paper money and the certificates were redeemable at a definite date, but at a reduction of at least 3 per cent of their value; this, too, yielded a certain revenue to the state.

The inflation that resulted from all these measures brought profit to the big merchants in spite of the fact that they had to supply directly or indirectly all non-agricultural taxes (in 1160 some 40,000,000 strings annually), especially the salt tax (50 per cent), wine tax (36 per cent), tea tax (7 per cent) and customs (7 per cent). Although the official economic thinking remained Confucian, i.e. anti-business and pro-agrarian, we find in this time insight in price laws, for instance, that peace times and/or decrease of population induce deflation. The government had always attempted to manipulate the prices by interference. Already in much earlier times, again and again, attempts had been made to lower the prices by the so-called "ever-normal granaries" of the government which threw grain on the market when prices were too high and bought grain when prices were low. But now, in addition to such measures, we also find others which exhibit a deeper insight: in a period of starvation, the scholar and official Fan Chung-yen instead of officially reducing grain prices, raised the prices in his district considerably. Although the population got angry, merchants started to import large amounts of grain; as soon as this happened, Fan (himself a big landowner) reduced the price again. Similar results were achieved by others by just stimulating merchants to import grain into deficit areas.

With the social structure of medieval Europe, similar financial and fiscal developments which gave new chances to merchants, eventually led to industrial capitalism and industrial society. In China, however, the gentry in their capacity of officials hindered the growth of independent trade, and permitted its existence only in association with themselves. As they also represented landed property, it was in land that the newly-formed capital was invested. Thus we see in the Sung period, and especially in the eleventh century, the greatest accumulation of estates that there had ever been up to then in China.

Many of these estates came into origin as gifts of the emperor to individuals or to temples, others were created on hillsides on land which belonged to the villages. From this time on, the rest of the village commons in China proper disappeared. Villagers could no longer use the top-soil of the hills as fertilizer, or the trees as firewood and building material. In addition, the hillside estates diverted the water of springs and creeks, thus damaging severely the irrigation works of the villagers in the plains. The estates (chuang) were controlled by appointed managers who often became hereditary managers. The tenants on the estates were quite often non-registered migrants, of whom we spoke previously as "vagrants", and as such they depended upon the managers who could always denounce them to the authorities which would lead to punishment because nobody was allowed to leave his home without officially changing his registration. Many estates operated mills and even textile factories with non-registered weavers. Others seem to have specialized in sheep breeding. Present-day village names ending with -chuang indicate such former estates. A new development in this period were the "clan estates" (i-chuang), created by Fan Chung-yen (989-1052) in 1048. The income of these clan estates were used for the benefit of the whole clan, were controlled by clan-appointed managers and had tax-free status, guaranteed by the government which regarded them as welfare institutions. Technically, they might better be called corporations because they were similar in structure to some of our industrial corporations. Under the Chinese economic system, large-scale landowning always proved socially and politically injurious. Up to very recent times the peasant who rented his land paid 40-50 per cent of the produce to the landowner, who was responsible for payment of the normal land tax. The landlord, however, had always found means of evading payment. As each district had to yield a definite amount of taxation, the more the big landowners succeeded in evading payment the more had to be paid by the independent small farmers. These independent peasants could then either "give" their land to the big landowner and pay rent to him, thus escaping from the attentions of the tax-officer, or simply leave the district and secretly enter another one where they were not registered. In either case the government lost taxes.

Large-scale landowning proved especially injurious in the Sung period, for two reasons. To begin with, the official salaries, which had always been small in China, were now totally inadequate, and so the officials were given a fixed quantity of land, the yield of which was regarded as an addition to salary. This land was free from part of the taxes. Before long the officials had secured the liberation of the whole of their land from the chief taxes. In the second place, the taxation system was simplified by making the amount of tax proportional to the amount of land owned. The lowest bracket, however, in this new system of taxation comprised more land than a poor peasant would actually own, and this was a heavy blow to the small peasant-owners, who in the past had paid a proportion of their produce. Most of them had so little land that they could barely live on its yield. Their liability to taxation was at all times a very heavy burden to them while the big landowners got off lightly. Thus this measure, though administratively a saving of expense, proved unsocial.

All this made itself felt especially in the south with its great estates of tax-evading landowners. Here the remaining small peasant-owners had to pay the new taxes or to become tenants of the landowners and lose their property. The north was still suffering from the war-devastation of the tenth century. As the landlords were always the first sufferers from popular uprisings as well as from war, they had disappeared, leaving their former tenants as free peasants. From this period on, we have enough data to observe a social "law ": as the capital was the largest consumer, especially of high-priced products such as vegetables which could not be transported over long distances, the gentry always tried to control the land around the capital. Here, we find the highest concentration of landlords and tenants. Production in this circle shifted from rice and wheat to mulberry trees for silk, and vegetables grown under the trees. These urban demands resulted in the growth of an "industrial" quarter on the outskirts of the capital, in which especially silk for the upper classes was produced. The next circle also contained many landlords, but production was more in staple foods such as wheat and rice which could be transported. Exploitation in this second circle was not much less than in the first circle, because of less close supervision by the authorities. In the third circle we find independent subsistence farmers. Some provincial capitals, especially in Szechwan, exhibited a similar pattern of circles. With the shift of the capital, a complete reorganization appeared: landlords and officials gave up their properties, cultivation changed, and a new system of circles began to form around the new capital. We find, therefore, the grotesque result that the thinly populated province of Shensi in the north-west yielded about a quarter of the total revenues of the state: it had no large landowners, no wealthy gentry, with their evasion of taxation, only a mass of newly-settled small peasants' holdings. For this reason the government was particularly interested in that province, and closely watched the political changes in its neighbourhood. In 990 a man belonging to a sinified Toba family, living on the border of Shensi, had made himself king with the support of remnants of Toba tribes. In 1034 came severe fighting, and in 1038 the king proclaimed himself emperor, in the Hsia dynasty, and threatened the whole of north-western China. Tribute was now also paid to this state (250,000 strings), but the fight against it continued, to save that important province.

These were the main events in internal and external affairs during the Sung period until 1068. It will be seen that foreign affairs were of much less importance than developments in the country.

3 Reforms and Welfare schemes

The situation just described was bound to produce a reaction. In spite of the inflationary measures the revenue fell, partly in consequence of the tax evasions of the great landowners. It fell from 150,000,000 in 1021 to 116,000,000 in 1065. Expenditure did not fall, and there was a constant succession of budget deficits. The young emperor Shen Tsung (1068-1085) became convinced that the policy followed by the ruling clique of officials and gentry was bad, and he gave his adhesion to a small group led by Wang An-shih (1021-1086). The ruling gentry clique represented especially the interests of the large tea producers and merchants in Szechwan and Kiangsi. It advocated a policy of laisser-faire in trade: it held that everything would adjust itself. Wang An-shih himself came from Kiangsi and was therefore supported at first by the government clique, within which the Kiangsi group was trying to gain predominance over the Szechwan group. But Wang An-shih came from a poor family, as did his supporters, for whom he quickly secured posts. They represented the interests of the small landholders and the small dealers. This group succeeded in gaining power, and in carrying out a number of reforms, all directed against the monopolist merchants. Credits for small peasants were introduced, and officials were given bigger salaries, in order to make them independent and to recruit officials who were not big landowners. The army was greatly reduced, and in addition to the paid soldiery a national militia was created. Special attention was paid to the province of Shensi, whose conditions were taken more or less as a model.

It seems that one consequence of Wang's reforms was a strong fall in the prices, i.e. a deflation; therefore, as soon as the first decrees were issued, the large plantation owners and the merchants who were allied to them, offered furious opposition. A group of officials and landlords who still had large properties in the vicinity of Loyang—at that time a quiet cultural centre—also joined them. Even some of Wang An-shih's former adherents came out against him. After a few years the emperor was no longer able to retain Wang An-shih and had to abandon the new policy. How really economic interests were here at issue may be seen from the fact that for many of the new decrees which were not directly concerned with economic affairs, such, for instance, as the reform of the examination system, Wang An-shih was strongly attacked though his opponents had themselves advocated them in the past and had no practical objection to offer to them. The contest, however, between the two groups was not over. The monopolistic landowners and their merchants had the upper hand from 1086 to 1102, but then the advocates of the policy represented by Wang again came into power for a short time. They had but little success to show, as they did not remain in power long enough and, owing to the strong opposition, they were never able to make their control really effective.

Basically, both groups were against allowing the developing middle class and especially the merchants to gain too much freedom, and whatever freedom they in fact gained, came through extra-legal or illegal practices. A proverb of the time said "People hate their ruler as animals hate the net (of the hunter)". The basic laws of medieval times which had attempted to create stable social classes remained: down to the nineteenth century there were slaves, different classes of serfs or "commoners", and free burghers. Craftsmen remained under work obligation. Merchants were second-class people. Each class had to wear dresses of special colour and material, so that the social status of a person, even if he was not an official and thus recognizable by his insignia, was immediately clear when one